* Operating earnings 21c/shr vs Wall St view 19c/shr
* Revenue rises 4 percent to $5.7 bln
* CEO sees 12-pct global aluminum growth this year
* Shares slip in after-hours trade (Adds CEO comments on demand outlook, more analyst comment; adds byline)
By Steve James
NEW YORK, Jan 10 (Reuters) - Alcoa Inc (AA.N), the largest U.S. aluminum producer, reported a fourth-quarter profit on Monday and projected a 12-percent rise in demand for the metal in 2011, driven by aerospace and auto manufacturing.
But Alcoa shares, which hit a 12-month high last week, dropped 1.3 percent to $16.24 in after-hours trade on the New York Stock Exchange, with some analysts questioning whether the company's bullish forecast was realistic. Others suggested some profit-taking by investors.
"Pretty much every one of our end markets is improving," Chief Executive Officer Klaus Kleinfeld told analysts on a conference call when asked about his projection for a 12-percent global increase in aluminum demand.
"We do not expect the substantial growth to come from the U.S. and Europe. We believe that those emerging economies will accelerate and there the driver pretty much is infrastructure building, and all the other end markets that we are seeing, from automotive to packaging to building and construction."
Kleinfeld said Alcoa expects demand growth in the aerospace sector to increase 7 percent in 2011 and 5-11 percent in the auto industry.
The beverage can sector was likely to be flat to 2 percent higher this year, but Alcoa sees commercial construction industry demand for aluminum increasing 2 percent to 3 percent. In fact, he said the building sector, which was particularly badly hit by the recession, appeared to be improving.
"When you look at the monthly contracts awarded and the construction starts ... it looks really like a bottoming out. It is not dropping further.
"So it could well be, if you take an optimistic perspective, that we might be seeing the bottoming out of this market here in the U.S."
Analyst Curt Woodworth of Macquarie Research said Alcoa's outlook was "phenomenally strong and probably conservative."
But he noted that although the quarterly financial results beat Wall Street estimates, they were below the Street's unofficial "whisper number." He also said some investors might have been taking a profit after Alcoa's stock rose recently.
Marc Pado, a market strategist at Cantor Fitzgerald & Co, said the projected 12-percent demand increase was higher than expected. "The question arises then whether the economy is going to be picking up the pace for this kind of increase in demand."
Analyst John Tumazos, president of Veryindependent Research in Holmdel, New Jersey, was incredulous. "I don't think there's enough aluminum in the world. In order to get a 12-percent growth rate in 2011, the world auto industry would have to be very strong, and each region of the world would have to be very strong."
Alcoa said income from continuing operations was $258 million, or 24 cents per share -- 21 cents per share excluding special items. That compared with a loss of $266 million, or 27 cents per share in the same quarter of 2009. Net income in the 2010 fourth quarter was 24 cents per share.
Revenue rose 4 percent to $5.7 billion, said the company which is traditionally the first Dow component to report in the quarter. (Graphic: r.reuters.com/taf65r)
Analysts on average were expecting earnings of 19 cents per share and revenue of $5.71 billion.
"It looks like it's above expectations, and I think that's exactly what the market is going to need to continue its momentum," said Alan Lancz, president, Alan B. Lancz & Associates Inc.
"It's a good first shot across the bow for the earnings season," he added.
Alcoa said improved earnings were driven by higher pricing, continued strengthening in most end markets and improved productivity as a result of cost-cutting measures.
Results were offset somewhat by a weaker U.S. dollar and higher energy and raw material costs, it said.
Aluminum prices, which slumped dramatically during the recession, rose 11 percent last year -- 5 percent in the fourth quarter alone -- and are now near a two-year peak of $2,500 per tonne.
Analyst Bridget Freas, of Morningstar in Chicago, said she was not surprised by Alcoa's strong earnings.
"They've done a good job at improving margins and have cut overhead. Of course, the better aluminum pricing was what drove the higher-than-expected earnings," Freas said.
"I think it's a good sign that they expect global growth up 12 percent this year. It's optimistic, but reasonable."
Reporting by Steve James and Matt Daily; Editing by Bernard Orr